Wonkbook: The Tea Party takes over; the GOP's $3.9 trillion tax plan; small business bill moves
Voter rage! Anti-incumbent fever! A shocking upset! Ovide LaMontagne has an awesome name! But this is Wonkbook, so let's talk about the implications for policy. Sorry, sorry.
The immediate impact is that the GOP became that much less likely to take over the Senate in November. A clear Republican win in Delaware became a likely Republican loss. But though that's getting all the headlines, it slightly misses the point: The long-term impact of these primaries is not going to be on the incumbents who have been defeated. It'll be on the incumbents who survived.
It was hard for incumbent Republicans to see Sens. Bob Bennett and Lisa Murkowski unexpectedly toppled in their primaries. But Alaska and Utah are conservative, quirky states. They were likely targets for an angry conservative electorate. The same cannot be said for Delaware, a moderate state that often goes blue. Rep. Mike Castle's defeat was proof that no heterodox Republican is safe from a primary defeat -- it doesn't matter how popular you've been, or how clearly purple your electorate was. You're not safe. You're never safe.
Politicians are, by nature, a fearful species. But their nightmares became a lot more specific last night. The Tea Party, for all its unexpected successes, cannot topple every incumbent Republican in the country. But by toppling the right ones, it can make every incumbent Republican vote and speak and act with the Tea Party in mind. So though the Te Party isn't likely to send all that many of its own Republicans to Washington, the likely outcome of last night's primaries is that the Tea Party takes over the Republicans who are already in Washington, and don't want to be sent home.
Welcome to Wonkbook.
Dan Balz explains it all: "Christine O'Donnell, a 'tea party'-backed long-shot candidate, stunned the Republican establishment Tuesday night by defeating nine-term Rep. Michael N. Castle in Delaware's GOP Senate primary, one of the most shocking upsets in an already tumultuous primary season...The outcome was the latest in a string of embarrassments for the Republican establishment this year, underscoring the civil war that continues to rage in the party. Last month, Sen. Lisa Murkowski of Alaska lost her primary to political newcomer Joe Miller, who like O'Donnell had the support of Palin and tea party activists. Last spring, tea party forces defeated Sen. Robert F. Bennett of Utah at the Republican state convention."
"Those were the most prominent Republicans to fall to the grass-roots movement that is roiling the party, but hardly the only ones. Establishment-backed candidates in Kentucky, Nevada, Colorado and Connecticut also lost in their primaries, and in Florida, Gov. Charlie Crist bolted the party rather than risk losing the Senate nomination to conservative Marco Rubio. "
Republicans' new tax plan will increase the deficit by $3.9 trillion, reports Lori Montgomery: "Aides to McConnell said they have yet to receive a cost estimate for the measure. But the nonpartisan Congressional Budget Office recently forecast that a similar, slightly more expensive package that includes a full repeal of the estate tax would force the nation to borrow an additional $3.9 trillion over the next decade and increase interest payments on the national debt by $950 billion. That's more than four times the projected deficit impact of President Obama's health-care overhaul and stimulus package combined."
House Democrats are having trouble reaching a consensus on the Bush tax cuts: http://bit.ly/chbvdT
Obama's small business lending bill broke a filibuster, reports Brady Dennis: "The 61-37 vote paves the way for final Senate passage of the aid package, which includes a $30 billion lending fund and about $12 billion in tax relief for small businesses. The longstanding logjam over the legislation ended thanks to Sen. George Voinovich (R-Ohio), who had said he would join Democrats in helping push the small-business incentives through the Senate because the economy was 'really hurting.' Democrats heaped praise Tuesday on Voinovich, who was joined by fellow Republican George LeMieux (R-Fla.) to help Democrats eclipse the 60 votes needed to overcome the threat of a filibuster."
Chris Dodd says there's little Senate desire to vote on Fed nominees, reports Corey Boles: http://bit.ly/9Pd7EC
More families are making use of the safety net due to the recession, reports Sara Murray: "As recently as the early 1980s, about 30% of Americans lived in households in which an individual was receiving Social Security, subsidized housing, jobless benefits or other government-provided benefits. By the third quarter of 2008, 44% were, according to the most recent Census Bureau data. That number has undoubtedly gone up, as the recession has hammered incomes. Some 41.3 million people were on food stamps as of June 2010, for instance, up 45% from June 2008. With unemployment high and federal jobless benefits now available for up to 99 weeks, 9.7 million unemployed workers were receiving checks in late August 2010, more than twice as many as the 4.2 million in August 2008."
'60s pop interlude: Ike & Tina Turner play "River Deep - Mountain High".
Still to come: Felix Rotahyn makes the case for a national investment bank; the vote on stripping EPA powers has been canceled; the DREAM Act will receive a vote next week; and a dog and a cat cover pop songs.
Ed Glaeser evaluates Austan Goolsbee as an economist: http://nyti.ms/cJ6dwS
Lazard CEO Felix Rohatyn argues for a national infrastructure bank: "A national infrastructure bank could begin to reverse federal policies that treat infrastructure as a way to give states and localities resources for projects that meet local political objectives rather than national economic ones. The bank would evaluate prospective infrastructure projects on consistent terms. It would be able to negotiate with state or local sponsors of a project what their cost shares should be. The bank also could help groups of states come together for regional projects such as high-speed rail and better freight management. Such consolidation would improve project selection. "
Left-wing groups are increasing their criticism of the White House on trade: http://nyti.ms/blg9N3
Small businesses aren't better job engines than big companies, writes Ruth Marcus: "A study that Acs conducted for the SBA found that 'most, if not all, of the growth in employment comes from the 300,000 high-impact firms in the economy over any four-year period. Depending on the time period studied, this is about evenly split between firms with fewer than 500 employees (the SBA definition of small business) and firms with more than 500 employees. Therefore, it would appear that both small and large firms contribute about equally to employment growth.'"
Stephen Roach thinks the US could learn from China's approach to currency pricing: http://nyti.ms/aqQpSY
Steve Pearlstein sees bank regulators learning their lesson from the crisis: "Regulators claim that they now see the folly of their over-reliance on market indicators, such as quarterly profits or current asset values, in assessing the financial health of a bank or the quality of its loans. Supervisors have been told to be more forward looking in their analysis and less optimistic in their assumptions about future profits and prices. Particularly for the larger institutions, the focus now is as much on the overall business strategy of the bank as it is on a review of the loan book. 'The challenge is: How do you institutionalize skepticism?' said Dan Tarullo, the Fed governor and onetime critic who is now spearheading a top-to-bottom overhaul of the Fed's bank supervision."
Robert Gates is cutting $100 billion in defense spending: http://bit.ly/cnnPXC
The income gap persists, but African-Americans are increasingly on the right side of the happiness gap, writes David Leonhardt: "In 1975, per capita black income was 41 percent lower than per capita white income. Since then, the gap has shrunk only modestly, to 35 percent. The black unemployment rate today is nearly twice as high as the white rate, just as it was in 1975. And by some measures — family structure, college graduation, incarceration — racial gaps have actually grown. But now a new study has found that there is one big realm in which black Americans have made major progress: happiness."
Canine cover interlude: A dog plays "I Can't Give You Anything But Love" on accordion.
A schedule change has saved Democrats a vote on stripping the EPA of its powers over climate change, reports Darren Samuelsohn: "Sen. Dianne Feinstein (D-Calif.), chairwoman of the subcommittee in charge of EPA’s budget, issued a statement blaming the delay on a $100 million amendment offered by the White House Monday affecting the reorganization of the Interior agency that oversees offshore drilling permits and revenue. But Republicans quickly labeled Democrats as chickens, saying the schedule change was really about EPA."
The oil industry beat an effort to exclude it from a tax deduction: http://bit.ly/a0WavF
Henry Waxman promised action on climate change come 2011, reports Darren Samuelsohn: "'I think we’ve got to get away form looking at this issue as a partisan issue,' Waxman said. 'Unfortunately it has become partisan, as has everything become partisan. Even the Republican voters seem in their minds to identify the [climate] science as somewhat partisan. But I think the issue is becoming more and more serious and people are realizing it, which I hope will increase the pressure on the Congress to take the actions we need to.'"
An interview with the World Bank's new climate change head: http://bit.ly/9k77Gh
Utility companies are fighting over how to finance renewable energy absent federal action, writes Andrew Restuccia: "Utilities recognize the shift to green energy as a major growth prospect. But they also recognize an impediment: Infrastructure. Indeed, across the country, utility and energy companies are preparing for a massive fight over how to deliver clean energy to people’s homes -- and, more to the point, who will pay for the necessary infrastructure to get the energy there. Behind the scenes, in recent months, utilities have battled over how to allocate the costs of the new high-powered electric lines necessary to move wind energy from one part of the country to the other."
The Clean Air Act is forty: http://bit.ly/9efbnC
French "feed-in tariffs" requiring renewable energy actually save money, writes Paul Gipe: "French feed-in tariffs for wind, hydro, biogas, and other technologies not only did not cost money in 2008, but also saved French ratepayers five million euros ($6.4 million) through the year. Conventional wisdom suggests that as more and more renewables are added to a utility's generating mix, the average cost of electricity increases. Thus, as France adds more renewable energy from its program of differentiated feed-in tariffs, the cost of the program should steadily increase. In 2008, Cécile Bordier at the French bank Caisse des Dépôts examined the cost of France's renewable energy program. Bordier found that, on the contrary, the cost of the French program was declining as renewable generation was growing."
Meowrissey interlude: A cat covers The Smiths' "Ask".
The DREAM Act will be proposed as a defense bill amendment next week, reports Carrie Budoff Brown: "The DREAM Act provides a path to citizenship for young undocumented immigrants if they were in the United States before age 16, and if they have been residents for five years before enactment of the law. Reid could not say whether he has 60 votes to overcome a filibuster but added, 'I sure hope so.'...Democrats need some Republican votes, yet it's unclear if any will step forward. Sen. Richard Lugar (R-Ind.), a Republican co-sponsor, has not yet indicated whether he supports adding the DREAM Act as an amendment to the defense bill, his spokesman said Tuesday. Sen. John Cornyn (R-Texas), a target for Democrats, will not make a decision until he reviews the bill language, his spokesman said."
John Kerry wants to reduce immigration raids: http://politi.co/a9nCYv
A Senate attempt to amend health care reform failed yesterday, reports Alexander Bolton: "In a 46-52 vote, lawmakers killed an amendment sponsored by Sen. Mike Johanns (R-Neb.) that would have saved businesses and nonprofit groups from having to report an array of small and medium-sized purchases to the Internal Revenue Service. A handful of Democrats voted for the Johanns proposal, including Sens. Evan Bayh (Ind.), Michael Bennet (Colo.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Mark Pryor (Ark.), Mark Warner (Va.), and Jim Webb (Va.)."
The midterms will likely hurt immigration reform's prospects: http://politi.co/ag84Mq
A federal judge will allow states' challenge to health care reform to advance, reports Jennifer Haberkorn: "U.S. District Judge Roger Vinson scheduled oral arguments to begin Dec. 16 in Pensacola, Fla., but did not say which parts of the lawsuit he will approve. Vinson said he plans to issue a complete ruling by Oct. 14...The Obama administration asked Vinson to throw out the lawsuit, arguing that only individuals have the standing to challenge the requirement and that states can opt-out of the Medicaid program if they don’t want to meet the new rules."
A small change in a child nutrition bill would save $100 million in subsidies to baby formula companies: http://bit.ly/9rnAQw
Tom Coburn is blocking a food safety bill, reports Meredith Shiner: "Majority Leader Harry Reid (D-Nev.) told reporters Tuesday he believed the bipartisan legislation -- which gained momentum over recess as thousands of Americans fell ill from more than half a billion contaminated eggs -- could pass within the next 24 hours....Coburn's office confirmed to POLITICO Tuesday that the Republican is objecting to moving forward on the bill on the grounds that it will add to the burgeoning federal budget. Coburn has become the GOP champion for demanding that legislation be fully paid for, staging or threatening filibusters this year on legislation ranging from war spending to unemployment benefits."
Closing credit: Wonkbook is compiled with the help of Dylan Matthews and Mike Shepard. Photo credit: Rob Carr-AP.
September 15, 2010; 7:12 AM ET
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